Prospects of the LED lighting market in Indonesia is promising and set to soar this year, due to growing electrification ratio in the country, reported Indonesia Investments.

The electrification ratio in India, which measures the percentage of households connected to the nation’s electricity grid, was about 85% in 2015, indicating more than 40 million Indonesians are still living in the dark. With the Indonesian government striving to raise the electrification demands, correlated lighting market growth is also expected, and creating numerous business opportunities in the local lighting market.

LED sales in 2015 increased 50% YoY to 60 million LED bulbs, compared to 40 million LED bulbs in 2014, said John Manoppo, Chairman of the Indonesian Electrical Lighting Industry Association (Aperlindo). Sales of non-LED energy efficient bulbs remained flat last year at 340 million bulbs. Most of the LED bulbs sold in the country are low-priced bulbs mostly imported from China, since the countries signed a mutual recognize agreement (MRA) which cuts import tariffs for LED and other energy efficient lighting to 5%, added Manoppo. He did not reveal the exact bulb import figures.

Manoppo is planning to submit a petition to the Indonesian government to increase the import tariff for LED bulbs to 15% to 25% to curb foreign imports, and boost domestic LED bulb manufacturing. Higher import tariffs would make imports more expensive. The ministry has not received the request yet from Aperlindo, said I Gusti Putu Suryawirawan, Director General of Metal, Machinery, Transportation Equipment and Electronic Industries at Indonesia's Industry Ministry.

The Indonesian government unveiled a program to develop 35,000 MW of additional power generation capacity mostly through coal-fired plants by 2019 to expand electricity grid coverage in the nation. There are still about 12,659 villages in Indonesia living without access to electricity, and supply more electricity to regions with power shortages.

The power grid expansion is expected to boost LED lighting demands. To see a list of leading Indonesian LED manufacturers in the country, please click here.